Importance of Financial Stability Ratios

Common ratios to judge the financial stability of a business concern are gearing ratio, contemporary ratio and liquid ratio. Gearing ratio shows the extent of a firm's reliance on debt to fund its activities. As the proportion of debt climbs (exceptionally if it exceeds 65 percent of total funds for most businesses), the greater the risk of financial distress. More information: click here to view more of this

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